Excel Legacy Announces Transition Period Five Month Earnings.

SAN DIEGO--(BUSINESS WIRE)--Feb. 16, 1999--Excel Legacy Corp. (Legacy) (AMEX:XLG) today reported the filing of a five month transition period report from Aug. 1, 1998 to Dec. 31, 1998.

This transition report is required because of the change in fiscal year-end from July 31, to December 31 adopted by the Board of Directors on Dec. 11, 1998. Although the company was formed on Nov. 17, 1997, there were no operational results from inception through Dec. 31, 1997 and as such prior period comparison results have not been presented.

The company reported total revenue for the transition period of five months ended Dec. 31, 1998, of $15.0 million. Net income for the period was $0.7 million or under the basic earnings per share (basic) was $0.02 per share and $0.01 per share under the diluted earnings per share (diluted). The company uses a supplemental performance measure called Earnings Before Depreciation, Amortization and Deferred Taxes (EBDADT) to report its earnings.

This parameter represents net income plus depreciation and amortization on real estate assets and deferred taxes. EBDADT is not a measure of operating results or cash flows from operating activities as defined by generally accepted accounting principles and it should not be used as an indicator of cash available or as an alternative to cash flows.

The company believes however, that EBDADT provides relevant information about its operations and is necessary, along with net income, for an understanding of its operating results. EBDADT for the five month transition period ended Dec. 31, 1998 was $2.7 million or $0.08 per share basic and $0.05 per share diluted.

The balance sheet of the company reported assets at Dec. 31, 1998 of approximately $261 million and liabilities of approximately $94 million. Net real estate assets were approximately $191 million and total stockholders' equity was approximately $167 million.

Excel Legacy is a public real estate company organized to create value through the acquisition, development and management of real property and real estate-related operating companies.

The company is actively pursuing a variety of real estate opportunities including developing long-term, mixed-use, retail/entertainment projects, engaging in short-term trading opportunities, investing in properties requiring significant restructuring or redevelopment in order to create substantial value, such as changing the use, tenant mix or focus of the property and acquiring single-tenant properties that can be leveraged with long-term fully-amortizing debt.

Certain statements in this release that are not historical fact may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of the company to differ materially from historical results or from any results expressed or implied by such forward-looking statements, including without limitation: national and local economic conditions; the competitive environment in which the company operates; financing risks; property management risks; acquisition and development risks; potential environmental and other liabilities; and other factors affecting the real estate industry generally. The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Certain Cautionary Statements" in the company's Annual Report on Form 10-K for the fiscal year ended July 31, 1998, which discuss these and other factors that could adversely affect the company's results.